Select Committee on Culture, Media and Sport Minutes of Evidence


Supplementary memorandum submitted by UK Sport

INTRODUCTION

  1.  UK Sport is pleased to respond to the specific questions put to it by the Select Committee following submission of its earlier memorandum of 4 December 2000. The questions will be answered in the order they were posed.

Question 1: "Is Sport England's account of the initial view of UK Sport on Olympic athletic events at Wembley (SE3, para 9.19) correct? If so, why did UK Sport give this advice and why did it subsequently revise it?"

  2.  UK Sport received two letters from Sport England on 11 and 25 October 2000 seeking our views on the proposal to remove athletics from the English National Stadium, Wembley and on the proposal for a National Athletics Centre at Picketts Lock, Lee Valley. Our response of 3 November 2000 was drafted and signed during the absence of the Chief Executive at the Paralympic Games in Sydney and a clerical error in its composition meant it did not accurately reflect the position of UK Sport.

  3.  Our position has been, and remains, that we support the reasons for the decision of the Secretary of State to remove athletics from the English National Stadium. We also believe that Wembley should remain a potential venue for other Olympic events such as the opening and closing ceremonies and the football tournament. UK Sport has, from the beginning, supported UK Athletics' bid to bring the World Athletics Championships to the UK. We understand the current proposals for Picketts Lock will result in a legacy stadium of circa 20,000, after the staging of the 2005 Championships. In addition, UK Sport is therefore following closely the news of investigations now under way within the proposed new Wembley project, exploring a range of design options which may enable the incorporation of a major athletics event within the stadium at a future date. The 2005 Athletics World Championships is a key element of our major events strategy. Indeed we put significant Lottery support into the successful bid campaign.

  4.  This position, together with an acknowledgement of the potential confusion we may have caused in our letter of 3 November, was communicated to Sport England on 4 December 2000 as soon as it was discovered that the content of our earlier letter was inaccurate.

Question 2: "What advice has UK Sport given to the Government on the implications if the 2005 World Athletics Championships are not staged at Picketts Lock?"

  5.  UK Sport has not been formally asked for such advice by the Government. We do however participate in a stakeholder group chaired by the Secretary of State to monitor progress on the development of the Lee Valley Stadium. In this gathering we have reiterated our position of supporting a bid from London to host the 2005 World Athletics Championships on the understanding that a suitable venue and supporting infrastructure would be available in time for the Championships. This undertaking was given to the IAAF at the time of presentation of the bid.

Question 3: "What has been UK Sport's involvement in examination of a possible London Olympic bid?"

  6.  To date, UK Sport has not been consulted or asked to undertake any formal independent examination of a possible London Olympic bid. The successful staging of the Olympics is at the heart of our major events strategy and as an event that has implications on the whole of sport, we would anticipate being consulted and providing appropriate advice and assistance. Our priority would be on verifying the ability of London to deliver the event to world class standards and on the UK's prospects of winning what will inevitably be a highly competitive bidding process.

Question 4: "What is UK Sport's assessment of the current state of preparations for such an Olympic bid?"

  7.  As set out above, UK Sport has not yet been involved in the examination of a possible London Olympic bid. We are aware that the BOA has been conducting research into a broad spectrum of issues involved in the bidding for and hosting of an Olympic Games.

  8.  As the world's largest sporting event, the challenge to any city wishing to host a successful Games is substantial and requires very careful consideration. We understand a number of experts have been consulted by the BOA in preparing their report but up to now we have not been asked to contribute to this process. We remain prepared to assist and provide technical and sport political advice.

Question 5: "What is UK Sport's assessment of proposals and prospects for venues for sports for a London Olympics, and athletics and swimming in particular?"

  9.  UK Sport has not yet seen the feasibility study undertaken by the BOA and has therefore been unable to assess proposals and prospects for venues for sports for a London Olympic Games. Any major venues currently in the planning stage for London should not be built so as to preclude their use for any future London Olympic Games.

  10.  It will be important to develop a venues strategy that both optimises the management and operation of a Games and satisfies the high standards demanded by the IOC and the individual sporting federations. We would wish to see any required new build providing a lasting sporting legacy with appropriate long-tem community and high performance use.

Question 6: "Has UK Sport considered underwriting sporting events in the same way as the Sports Council for Wales and, if that practice has not been adopted, why not?"

  11.  The four home country sports councils and UK Sport operate Lottery programmes in support of major events. As such we are required to operate within strict financial boundaries discussed with and approved by the National Audit Office.

  12.  UK Sport has worked with the other sports councils to ensure a complementary programme with a common approach to those seeking our support and guidance. It is our understanding that whilst the Sports Council for Wales may refer to its approach being one of "underwriting" an event, there is in effect little difference in our approach. Neither organisation is in a position to underwrite an event as this would mean assuming final responsibility for any loss be it anticipated or not, something forbidden by our financial memoranda with government. The Sports Council for Wales also operates a maximum award of £50,000 which means it cannot be in a position to underwrite an event. Our approach is to consider the overall operation of the event and to "deficit fund". In this way we only support eligible costs (such items as hospitality, gifts, prize money etc are ineligible) and do not make an award of more than 35 per cent of the total cost of eligible items. We expect applicants to raise significant funds from non-Lottery sources and to have made a contribution from their own funds.

  13.  The policy of the Sports Council for Wales requires repayment of any surplus on a full or pro rata basis. UK Sport (and other Sports Councils) also retains this option but permits reinvestment of any surplus in the further development of the sport, subject to agreement.

  14.  This is considered a fair policy as the budgeting for major events is not a precise science and carries an element of risk. Whilst detailed evaluation is undertaken by UK Sport to assess the level of Lottery support required to ensure a break-even budget, extra effort, tight expenditure control or marketing and ticketing strategies which exceed the targets set, can all contribute to a final profit. We consider it important to retain this incentive and the option to channel any surplus into further development of the sport.

Question 7: "What is the current position of UK Sport regarding preparations for the 2003 World Indoor Athletic Championships? What funding commitment has been made and what is the current state of planning of the budget for the event?"

  15.  UK Sport is actively engaged with the City of Birmingham and UK Athletics in preparations for the World Indoor Athletics Championships in 2003. The National Indoor Arena (NIA) is one of the pre-eminent athletic arenas in the world and was originally conceived to stage such an event as this. The knowledge and expertise of the NIA and City of Birmingham staff in organising world level events gives us confidence that the event will be a great success.

  16.  An event director has been appointed by the city together with key support personnel and a championship office has been established at the NIA. Contract negotiations with the IAAF and its agents are progressing well and will be concluded shortly. Exact dates for the championships are yet to be finalised with ongoing discussions with the IAAF and broadcasters relating to the most suitable three-day period for all parties in March 2003.

  17.  UK Sport is working closely with the Championship Director in the preparation of the event budget using a business planning model we developed with Deloitte Touche for the 2006 World Cup Bid and used on the 2005 World Athletics Championships Bid. This model ensures consideration is given to all potential income and cost centres for an event of this complexity and enables a robust evaluation of expenditure and income by clearly detailing assumptions and the impact of critical variables eg currency exchange rates, tickets sale projections etc. The model also enables an estimate of the economic impact of the event by providing the detailed numbers required to feed into the impact model we have been developing with consultants at Sheffield Hallam University.

  18.  It is anticipated that the City of Birmingham will be in a position to submit its formal application and budget for the event in March 2001. This will be considered by the Major Events Steering Group at their April 2001 meeting at which time recommendations will be made to the Council of UK Sport on the level of funding.

Question 8: "What is UK Sport's policy towards public support for veterans and masters events in the context of its major events strategy?"

  19.  The focus of our policy on major events is towards the principal recognised and established events of the international sports federations that are hosted in different parts of the world. This is clearly targeted at youth and those aspiring to be the best in their chosen sport and is closely linked to the support we are channelling into sports through the World Class Performance Programme. We wish to capitalise on this investment in high performance athletes by securing opportunities to showcase British talent on home soil to the maximum number of the public and to the maximum advantage of home competitors. As resources for events are very limited (£1.6m per annum) priorities have to be set and we have developed a set of criteria against which all events will be assessed. These have been shared with the Committee previously.

  20.  Whilst masters events would not currently be a priority for staging support through the World Class Events Programme, we acknowledge the growing importance of master level events and the fact that some master athletes are aged as low as 25-30. We would wish to see that the knowledge and experience we are developing on the successful staging of events was shared with the organisers of any masters event secured by the UK. It is in the best interests of the country that all international sports events are seen to be a success in the eyes of the world at large. This only enhances our ability to secure more events in an increasingly competitive environment.

  21.  The economic impact of certain masters events can be significant on the local and regional economies as the accompanying family profile and individual spend of masters events is very high, frequently associated with extended holiday commitments. We believe this type of event would be of interest to tourism and other local/regional development agencies.

  22.  For the reasons given above it is fair to say that we do not exclude the possibility of supporting masters events but that their profile and priority has to be closely assessed against available resources and the primary demands of the Lottery funded programme. We would be prepared to be a partner in supporting the bidding costs for an appropriate masters event on the understanding that the staging costs could be met from other sources, not least the income generated by the event itself.

January 2001


 
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